Financial mismanagement at all levels of the NHS in England has led to the current £547m deficit, a committee of MPs has found.
A report by the Commons health select committee said existing deficits were made worse by the cost of new staff pay deals and the expense of meeting NHS targets.
The government fuelled the problem by agreeing to new pay deals for doctors and nurses using cost estimates that were “hopelessly unrealistic”, the report said.
More staff have also come into the health service than were proposed by the government.
Meeting national targets – such as the requirement that no patient should wait more than four hours in A&E – had been costly, it said.
Raiding staff training budgets to meet deficits was “unacceptable”, and the committee warned such cuts were affecting staff morale and could damage the quality of the workforce.
However, the committee also said trusts should shoulder some of the blame for the current situation. It cited one hospital trust which recruited staff without knowing whether it could afford to pay them, and a primary care trust which had failed to hire key finance staff.
But Dr Gill Morgan, chief executive of the NHS Confederation, who defended managers, said: “It is a shame that the health select committee has taken the easy route of blaming NHS managers for all the financial problems in the NHS.”
The government said the NHS budget had doubled since 1997 and would almost triple by 2008, when UK healthcare spending would reach the European average.